Effect of the new trade sanctions on USA and other markets

USA is going around in circles in trying to reduce imports of Chinese made solar products, as it is only benefiting other countries and raising the prices of solar energy in the country. Chinese imports of solar panels have reduced but other countries have increased their exports to the USA. US solar manufacturers have not really seen any great improvement from the anti- dumping duties imposed during 2012. It only hurt most of the mom and pop shops, while the big players such as SolarCity, SunRun etc. continue to make outsized revenues on back of their strong sourcing from large non-Chinese players. Even large Chinese module shippers like Trina, Renesola, Yingli have managed to easily circumvent the duties and have increased their marketshare in the USA.

The new round of AD and countervailing duties on Chinese and Taiwanese cells will also prove to be ineffective, as the Chinese costs are almost 30% lower than the comparable USA made solar panels and cells. So even with duties, Chinese will be competitive in the USA market. The losers will be US customers, who will have to pay anything between 10-15% higher costs for solar energy. You will also see increasing sales from non-Chinese players such as the South Koreans and the Canadians who have built some capacity but are unable to compete with the Chinese low costs.

Though SolarCity has announced a 1 GW factory, US capacity can only meet 20% of the current year’s demand of 6 GW in 2015. With prices of Chinese modules still lower than US made ones, I don’t see a lot of investments coming in. Also polysilicon, where USA has an advantage will lose its biggest market – China. REC has already reduced production and jobs and with the Chinese certain to get angrier; expect more repercussions on imports of USA made polysilicon and solar equipment.

First Solar has already abandoned its plant in China and I expect that USA companies will find it impossible to sell in the world’s largest solar market now. Some kind of deal such as that signed by Europe and China would have been a better way to reduce the trade friction between these blocs.

 DigiTimes

While the US Department of Commerce has set preliminary anti-subsidy and anti-dumping tariffs on PV products imported from China, China-based PV module makers can choose lighter tariffs imposed on 2012 instead of the new rates to keep their products price-competitive in the US market, according to industry sources.First-tier China-based PV module makers were subject to an average anti-dumping and anti-subsidy tariff of 30% in 2012, considerably lower than the new rates, the sources said. If they use China-produced solar-grade crystalline silicon wafers to produce solar cells and PV modules, their cash-flow production cost (not including loan interest, depreciation and amortization) for PV modules is estimated at US$0.55-0.58/W, the sources noted. Including the 2012 tariffs of about 30%, their total cost to export to the US market would be US$0.715-0.754/W, still competitive with an estimated cost of US$0.75/W for SolarWorld, the PV maker lodging the anti-dumping and anti-subsidy complaint, and Europe-, Japan- and South Korea-based makers, the sources indicated.